A building has been found - and donated - which will become the base for a Southland Charity Hospital.

The Clifton Club Inn is to be repurposed and turned into a day facility that would initially provide colonoscopies to patients to help cancer sufferers' chances of survival.

Southland Charity Hospital Board chair Dr Murray Pfeiffer said without the donation from the Invercargill Licensing Trust they would have had to raise another $2 million for the community-funded facility.

"We cannot understate the extraordinary generosity of the ILT in making this donation to us."

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"We're so grateful on behalf of our future patients for this donation."

The location is in close proximity to Southland Hospital, and ILT chief executive Chris Ramsay said all staff employed there currently would not lose their jobs but would be reassigned roles at other ILT establishments.

Melissa Vining said the hospital would not only be a legacy for her late husband, Blair, but also for all the work that had gone into improving cancer care in New Zealand, which would continue.

"This is a true reflection of our Southland community, and the generosity of Southlanders."

While there was no definite timeframe for when things would happen, they were working through the concept drawing stage and seeking tradesman to help with the repurposing of the building.

Anyone wanting to volunteer services can head to the Southland Charity Hospital website.